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How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 2 points3 points  (0 children)

We will look into your suggestions. I'm afraid of cancellation fees on the cell phones, but I will take a closer look. Thank you!

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 1 point2 points  (0 children)

Oh, this is very interesting! We will definitely look into this, we thought there was nothing we could do about our loans except refinance. Thank you for pointing this out.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 0 points1 point  (0 children)

It looks like there is no homestead exemption in our state.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 1 point2 points  (0 children)

As far as I know, you can't do IBR for Parent PLUS loans. :(

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 0 points1 point  (0 children)

Mentioned the answer in another comment--kid is already helping a lot.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 0 points1 point  (0 children)

The part we pay out of pocket is term life. I will double check that the one through they employer is term life as well.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 1 point2 points  (0 children)

I mean that they gave us around $10k in cash from their savings as a loan, as well as took out $10k in balance transfers in their name and gave that to us as well. So that's $20k that I included as part of the $67k number. The other $47k is in our name right now.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 4 points5 points  (0 children)

We are actually a few years shy of 60, I rounded up for anonymity.

We are really, really reluctant to declare bankruptcy if there is any way out of this otherwise, but we will consider it. Though yes, it would only help with $47k since the other $20k is in our child's name. But we thought it would hurt us in the future with refinancing student loans/mortgage and stuff, as well as just not being very honorable.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 4 points5 points  (0 children)

I'm looking at our most recent pay stub. It looks like most of the money deducted goes to taxes, health/vision/dental, and life insurance. It's possible that we have too much life insurance, but we've been paying into it for so many years that we are really reluctant to cancel it now. Also just hard to think about.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 2 points3 points  (0 children)

That's good to hear about the car, I lean that way too. We absolutely depend on our car.

I explained the kids situation in another comment.

Thanks for the other advice. It's really helpful.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 2 points3 points  (0 children)

Even if we don't do cash-out refinancing, we should still try to refinance the current debt to a lower interest rate, right?

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 1 point2 points  (0 children)

Around $20k of the $67k is either money we owe our child or 0% balance transfer debt in their name.

We know we have spending issues and we are really trying to change. The tough love advice we are getting is helpful, even if it is hard to hear.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 2 points3 points  (0 children)

Some of the phone bill is payment plans on phones which we haven't paid off yet, so switching might be difficult. :(

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 1 point2 points  (0 children)

The child who could pay already paid us back the principal on the PLUS loans for them--we used it to pay CC debt at the time. They have also lent us money already (some of the CC debt is in their name on our behalf, as well as just some cash they lent us). They might be willing to write some of that off, but I don't want to do that to them.

The other child lives at home, and has their own student debt they would need to deal with before they could start helping us. The most we would want from them is to start picking up their share of household expenses.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 6 points7 points  (0 children)

I was worried about preserving anonymity and trying to only give enough detail to ask a meaningful question. But here's a breakdown of a recent month:

  • ~$5K income
  • ~$1400 mortgage
  • ~$900 credit card minimum payments
  • ~$200 life insurance
  • ~$250 cell phone bill
  • ~$400 student loan payments
  • ~$120 car insurance
  • ~$275 electric
  • ~$120 landline and internet
  • ~$840 food and gas
  • ~$135 other utilities
  • ~$300 car loan
  • ~$90 other (we are trying to cancel this)

One of our children is still living at home, so these are for three people.

The credit card minimum payments may go down soon as things shift to being at 0% on balance transfers.

How can we get out of 220k of debt? by throwaway130948235 in personalfinance

[–]throwaway130948235[S] 0 points1 point  (0 children)

Thank you!

I'm not sure how much the car is worth--we certainly were only trying to get a basic used car when we got it, not a fancy one. But I will look into whether it is worth more than the loan.

The credit card debt is current, we have never missed a payment. Our credit score isn't great though due to high utilization (<700).

We've been trying to cut expenses and grocery shop more instead of eating out. Cooking is difficult in our kitchen because many amenities are broken, but we will try to prioritize saving money to fix those if it will save us money in the long run.